As private equity deal volumes increase, we are witnessing several trends within transaction timetables that are not dissimilar to how deals were approached back in 2007.

We’ve been busy on a number of transactions over the past few months, and a significant proportion have seen us get involved on fairly tight timetables for completion.

Ordinarily, terms of exclusivity might lead to two or three months of transaction diligence prior to completion, but we’ve been asked to become involved just four to six weeks away from a deal being concluded.

With the transactions market firmly in revival mode and competition between private equity houses proving fierce, vendor expectations seem to be buoyantly rising.

Shorter deal timetables have tended to occur when there is pressure to win an auction process, and deliverability becomes a key factor in vendors’ final decision as to whom they will sell their businesses. In these circumstances, sellers tend to make it a requirement for transactions to be completed more rapidly.

When the appetite for investment was more cautious, this was not so much of an issue, but competition in the PE market is certainly making a difference nowadays.

But there is a significant market difference compared to 2007 and the climate is certainly a lot calmer these days. With many still carrying the scars from that period, important lessons have been learned which has led to positive changes in the approach to completing investments.

Private equity houses are today a lot wiser to some elements of risk than they were back then, many with still-vivid memories of brave investment decisions made during that time. Today’s ‘senior statesmen’ in the private equity world have a more mature perspective than before the crash.

Investors now have a keen eye on the future as they look to purposefully grow their portfolio businesses over a period of three to five years.

There is a stronger focus upon proactive Human Capital planning and setting an agenda to ensure that management teams develop an awareness of the issues they need to address over the course of the investment. Succession planning, developing leadership capability in the top team and enhancing talent within the organisation – all focus on improving the prospects for delivering value and the appeal for future purchasers.

From our perspective, we will always move quickly when required, remaining responsive to the timetable demands without compromising quality.

We have plenty of experience to draw upon as we help PE houses scope out their investment model and move their transaction focus towards the all-important exit strategy.

But maximising the impact of Human Capital still remains as critical now as it was back in 2007 and it’s good to see the focus our clients have developed in this area produce some great opportunities for successful exits.

We are the UK’s leading Management Due Diligence and Human Capital Planning specialists, working closely with Private Equity. If you would like to receive specialist advice regarding Management Due Diligence, please contact us.